He alluded to something he read during the Covid-19 pandemic, which stated that the point of maximum uncertainty is the point of maximum return. From that low of 7,511, the Nifty 50 is has more than tripled in value.
Desai also said that unlike the past, retail investors will not give up this time. He added that retail investors were persistent sellers a decade ago and their holdings declined to 8% from 27% scarred by the previous scams.”A lot of people have been quizzing me about when will retail give up? And I have got tired of saying this, they won’t. You will get the data tomorrow. I won’t be surprised if it’s a record high or near about there,” he said.
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Desai is optimistic that India will outperform the world at large, including the US markets, who saw a sharp sell-off themselves on Monday night. As a sector, he expects financials to lead the market out of the problem.He also spoke about smallcaps and midcaps, who have now come out of their valuation excesses. The Nifty Midcap index is down 20% from its peak, while the Smallcap index is down 25%.
India’s growth slowdown was triggered by policy tightening, Desai said, but also added that the policy pivot seen from the Reserve Bank of India recently is the biggest he has seen in the last 35 years.
“Markets have ignored the RBI and government policy pivot but India’s policy environment is far more certain than the rest of the world,” the Morgan Stanley India MD said.
Unlike the past, India is now a “low beta” market, Desai said, adding that the FII “Underweight” positioning is at levels never seen before.
Calling India a “consumer staple stock”, Desai said that it will outperform in a global bear market.
First Published: Mar 11, 2025 10:49 am IS
